Technical and Derivatives Review | August 17, 2019
Hope of relief rally remains intact
Sensex (37350) / Nifty (11048)
Source: Trading View
Future outlook
Although the week gone by was a truncated one, it was not at all short of action. Despite some signs of relief rally from the previous week
and with a smart move by Index heavyweight Reliance of 10%, the market started with deep cuts on Tuesday losing more than one and a
half percent. In the rest two sessions, inspite of global turmoil, Nifty managed to avoid further slip and amidst a stock-specific bounce back
it eventually ended around 11050, registering a loss of around half a percent against the previous week.
In our last week’s outlook, we had mentioned a confluence zone of support formed by ‘89-EMA’ on weekly chart , multi-month trend line
support and 61.8% retracement level of the key rally (10004-12103). This week, the index again managed to hold on to the dynamic
support of above technical levels and hence the hope of relief rally remains intact. On the daily chart, we are witnessing a defined range
with market participants baffled between the current scenario of global turmoil and the hopes of a government stimulus package. The said
range between 11180 and 10900 will remain pivotal and the next directional move can only be seen on a range break from these levels. A
break below 10900 may push prices back to retest the recent low of 10780 and further; whereas on the higher side, a relief towards 11200
- 11300 cannot be ruled out. Traders are hence advised to keep a tab on the above levels and trade accordingly. The cement, metals and
auto stocks which were in a slumber phase for a while performed well and they may continue their outperformance in the coming week.
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Technical and Derivatives Review | August 17, 2019
10800-10900 to act as a strong base now
Nifty spot closed at 11047.80 this week, against a close of 11109.65 last week. The Put-Call Ratio has decreased from 1.24 to 1.21.
The annualized Cost of Carry is positive at 4.28%. The Open Interest of Nifty Futures has decreased by 6.20%.
Derivatives View
Nifty current month future closed with a premium of 16.85 points against a premium of 13.30 points to its spot. Next month future
is trading with a premium of 63.95 points.
As far as Nifty options activities for the week are concerned, we saw some build-up in 11000-11400 call options. On the other side,
10600, 10700 and 11000 puts added some fresh positions. Maximum open interest for the monthly series now stands at 11500 call
and 11000 put option.
During the truncated week, we saw index correcting from the resistance zone of 11100-11200 on Tuesday; but surprisingly, this fall
was mainly due to long unwinding. In next two trading sessions, we saw some recovery along with addition of fresh longs to end the
week tad above 11000 mark. The highest open interest concentration has now shifted higher from 10800 to 11000 put option;
which is certainly a positive development. As far as upside is concerned, strong resistance is now placed around 11200. We also
witnessed some buying interest by stronger hands in index futures, resulting their ‘Long Short Ratio’ increasing from 25% to 28%.
Going ahead, any up move beyond 11200 mark may result in an decent short covering move. Till the index sustains above 10800-
10900 mark, traders are advised to trade with a positive bias.
Long Formation
Short Formation
OI
OI
Price
OI
OI
Price
Scrip
Price
Scrip
Price
Futures
Chg (%)
Chg (%)
Futures
Chg (%)
Chg (%)
APOLLOHOSP
1578500
48.77
1458.30
7.75
GLENMARK
6231000
26.90
362.10
(14.93)
IBULHSGFIN
24447200
26.37
534.00
9.63
RELINFRA
13712000
15.07
45.25
(2.90)
BERGEPAINT
3348400
13.58
366.55
1.65
IDBI
26688000
13.70
24.35
(10.48)
RECLTD
28578000
8.45
148.00
3.17
ADANIPORTS
15232500
11.31
358.60
(5.16)
IDFCFIRSTB
163596000
8.12
45.55
4.00
TATAMTRDVR
35466000
10.61
56.75
(2.83)
Weekly change in OI
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Technical and Derivatives Review | August 17, 2019
Technical and Derivatives Team:
Sameet Chavan
Chief Analyst - Technical & Derivatives
[email protected]
Ruchit Jain
Technical Analyst
[email protected]
Rajesh Bhosale
Technical Analyst
[email protected]
Sneha Seth
Derivatives Analyst
[email protected]
Research Team Tel: 022 - 39357600
Website: www.angelbroking.com
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E-mail: [email protected]
For Derivatives Queries
E-mail: [email protected]
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Technical and Derivatives Review | August 17, 2019
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